An LLC is a popular business structure that offers owners liability protection while maintaining operational flexibility and pass-through taxation. This flexibility can lead to confusion regarding the titles and roles of individuals running the company. While “Member” and “Manager” are widely understood, the term “Governor” used in certain states adds complexity to the management hierarchy. Clarifying the statutory definition and functional comparison of the LLC Governor against the Member and Manager roles helps business owners understand their legal compliance and internal governance structure.
Defining the LLC Governor
The term “Governor” represents the person or group formally vested with the highest authority to manage the LLC’s business and affairs. This designation is a statutory term found in the state’s governing laws and official formation documents. The Governor’s role is similar to that of a director in a traditional corporation, focusing on high-level oversight and strategic policy-making.
State statute defines this role as the individual or entity authorized to exercise the powers of the LLC and direct its activities. This broad definition ensures that a clearly identifiable party is responsible for the entity’s overall governance, regardless of the internal management structure. An LLC must have at least one Governor, typically appointed by the Members, who acts in the company’s best interests.
State-Specific Terminology
The term “Governor” appears in some states due to the adoption of the Revised Uniform Limited Liability Company Act (RULLCA) or similar modernizing legislation. RULLCA introduced “Governor” as an overarching term to denote the ultimate management authority within any type of business entity, standardizing and updating state LLC laws.
States such as Washington, Minnesota, and Florida have incorporated this terminology into their statutes. This streamlines statutory language across various entity types, applying the same term to a director in a corporation or the managing authority in an LLC. Conversely, many states continue to use only the traditional terms of “Member” or “Manager” in their official documents.
Governor vs. Member vs. Manager
The Governor is a statutory title that maps directly onto the functional roles of either a Member or a Manager, depending on the LLC’s organizational structure. A Member is an owner of the LLC, holding an ownership interest and receiving a share of profits and losses. A Manager is the individual or group appointed to handle day-to-day operations and execute business contracts.
In a Member-Managed LLC, the owners are actively involved in the daily business, making the Members themselves the Governors. The statutory title of Governor applies to the Members because they hold the ultimate authority to direct the company’s affairs. This is often the default structure, where all owners have direct control over operations.
In a Manager-Managed LLC, the owners delegate operational control to a Manager, who may or may not be a Member. In this case, the statutory Governor is the Manager, as this person or group is legally charged with exercising the entity’s powers. The LLC’s Operating Agreement determines this distinction, defining whether the functional management role corresponds to the statutory role of the Governor.
Responsibilities and Authority of an LLC Governor
The authority of an LLC Governor focuses on strategic, high-level decisions rather than routine business operations. Governors are responsible for the overall long-term direction and integrity of the company. Their duties often mirror the fiduciary duties of corporate directors, requiring them to act in the LLC’s best interest.
Specific, non-ordinary-course actions are reserved exclusively for the Governors.
Reserved Actions for Governors
Signing and filing the initial formation documents, such as the Articles of Organization or Certificate of Formation.
Approving significant transactions, including mergers, the sale of substantially all assets, or major acquisitions.
Authorizing any amendment to the foundational Operating Agreement.
Approving the formal authorization of the LLC’s dissolution.
Formal Requirements for Listing a Governor
For compliance purposes, the identity of the LLC’s Governor or Governors must be disclosed to the state at the time of formation. This information is typically required on the Articles of Organization or Certificate of Formation, which are the public organic records of the entity. Listing a Governor ensures that the state and the public have a record of who is legally responsible for the entity’s direction.
While the initial organizer may be the only person required to be listed at first, all subsequent Governors must be identified and kept current with the state’s filing office. Failing to update this information, often done through an annual report or a specific amendment filing, can lead to compliance issues or administrative penalties, including the potential for the LLC to be administratively dissolved. In states that use the term, the Governor serves as the official point of contact for the state regarding the entity’s management structure.